Bread Price Fixing 30-01-08

 

Bread price-fixing

The Congress of South African Trade Unions has noted with anger that the Competition Commission has accused eight dairy-product companies of colluding to fix the price of milk.

At the time of the prosecution of Tiger Brands for fixing bread prices, COSATU called for a broader inquiry into the whole chain of production and distribution of food products. We are pleased therefore that the Competition Commission is now doing this, and have enough evidence to prosecute Clover Industries, Clover SA, Parmalat, Ladismith Cheese, Woodlands Dairy, Lancewood, Nestle SA and Milkwood Dairy for collusion to set the price of milk.

COSATU also welcomes the news that the Commission is investigating the supermarket chains following allegations that they too have been involved in milk price fixing.

It is absolutely outrageous that people can be profiteering from the sale of such basic foods as bread and milk, on which the poorest families spend such a high proportion of their small incomes. May of the poorest will be struggling to buy the minimum amount of food that their families need to remain healthy and run a greater risk of illnesses caused by malnutrition, as a direct result of the high prices.

Should the Competition Tribunal find the companies guilty, all those responsible must be punished much more severely than Tiger Brands, whose R99 million fine could be absorbed into their running costs and passed on to the consumer in higher prices. The directors of the companies must be held personally responsible and punished accordingly. They must also be forced to cut their prices in order to repay the consumers what has been unlawfully taken from them.

COSATU once again emphasises that the workers who produce this food – on the farms and in the dairies and bakeries – never get any benefit from the extra money fleeced from the consumers. On the contrary they are amongst the lowest paid workers and are themselves victims of the high prices. COSATU unions will undoubtedly be seeking to negotiate higher wages for their members to compensate them for the rise in their cost of living as a consequence of price-fixing.